Carbon Tax in a Trump Era: Will It Work?

in Canada/USA by

Prime Minister Justin Trudeau believes that the environment and the economy go hand in hand.

But, after the election of Donald Trump, his faith should falter a bit. If it doesn’t, then Trudeau is truly delusional. Trump is a notorious skeptic when it comes to the environment. He is known to believe that the climate change is a hoax. And his administration has also threatened to pull out of the Paris agreement.

Will the Canadian environmental and economic policies still go hand in hand? That is the question. May be it’s time for Canada’s Liberal government to choose one over the other. And we all know what it should be.

But do they?

Trump’s action

Now that Donald Trump is in the White House, Trudeau should rethink his climate change policy. If the Americans take any action that repeals any kind of environmental legislation in the country, Canada’s energy economy will slide further downward.

And the initial signs aren’t great. The recent conversations between Trump and Trudeau revolved around subjects like North American trade, immigration, mutual relations, and border security. The one thing they didn’t discuss was bilateral cooperation on climate change. It’s clear that Trump doesn’t set much store on “saving mother earth”.

Trudeau’s response

Now that we know Trump’s beliefs on global warming and the energy policy, the only rational way to react is to prepare for the oncoming change. How does Canada need to respond to the relaxed environmental regulations south of the border? The answer is simple. It needs to respond by relaxing regulations to maintain their competitive edge.

But the key question remains unanswered. Will Trudeau go easy on the federal carbon pricing plan across the country? Some of the companies are already closing down businesses in provinces like Alberta and Ontario. More will do so if Trump continues his policies.

Can Trudeau stop this trend?